PROBLEM 1 On January 1 of the current year A and B form a partnership to invest in property. A contributes investment land that she acquired two years ago, and that has a FMV of $100. A's basis in the land at the time she contributed it to the partnership is $50. B contributes $100 in cash. Each partner receives a 50% interest in the partnership's capital profits and losses. 1. Set up the opening balance sheet (tax & book). Assets 2. Under the "traditional method of accounting for $704(c) gain, how will the partnership allocate its gain or loss for book and tax purposes if the partnership sells the land for: 1. $100 2. $150 Liabilities & Equity 3. $ 70 4. $30